Battles to be Won

 

 

Ryan Ahn (00:00)
Hello and welcome to the Specialty Matcha Podcast. My name is Ryan, this is my co-host Zongjun

Zongjun (Sam) Li (00:04)
Hello, hello.

Ryan Ahn (00:05)
who also goes by Sam, and we're the co-founders of Sanko Matcha Products.

Zongjun (Sam) Li (00:10)
Yeah, we launched this podcast to discuss our learning journey in Matcha, share startup stories and interview experts. And today we're going to talk about some of the good battles to be won in the world of Matcha.

Ryan Ahn (00:21)
Yeah, so we titled this podcast episode Battles to be Won. And the idea of it is how do we get specialty matcha fully into the mainstream? Kind of like how specialty coffee kind of used to be a very rare thing. Like it was a movement started in the late 90s and early 2000s where you basically needed to live in a big city to access what we would refer to as specialty coffee.

know, lighter roast profiles, single cultivar, beans treated with care, companies like Blue Bottle, Intelligencia, Counter Culture. But, you know, if you didn't live on one of the two coasts and you went to middle America, you probably wouldn't have found specialty coffee. And now 20 years later, 25 years later, it is almost anywhere where even you can go to relatively small towns, not only in the States, but across the world and find people doing pour overs.

having really elaborate brewing equipment and very good coffee grinders and great sourcing, it's really become accessible and ubiquitous. So we wanted to talk about like, how do we get matcha in that exact same place? Like, how do we get it where it's much more accessible? Like Sam, when was the last time that you had a great matcha in a cafe when you're just out and about in your daily life?

Zongjun (Sam) Li (01:34)
In the cafe?

I cannot remember. But last time I had a good matcha was with you, Ryan. We opened

at Narino and very enjoyed it. But wow, last time I had a good matcha in the cafe.

Ryan Ahn (01:51)
Probably back in Bangkok, right?

Zongjun (Sam) Li (01:52)
Yeah, I must

be back in Bangkok in MTCH. But no, normally I just wouldn't order matcha when I walk into a cafe. Yeah, that's

Ryan Ahn (02:01)
Yeah, actually.

Zongjun (Sam) Li (02:03)
kind of sad. But I guess that's a lot of people's reaction too.

Ryan Ahn (02:08)
Yeah, actually what prompted this episode was quite a bit of personal frustration. A friend of a friend was visiting Paris. I live in Paris now. And she's really into matcha, really into tea, wanted to learn more about it. the place that I wanted to go to was closed, so we had to change plans. So we went to a coffee shop that has an OK matcha program. And we walk in there and I order a coffee. And she was very disappointed by

Zongjun (Sam) Li (02:30)
Thank you.

Ryan Ahn (02:32)
the fact that I was ordering a coffee. And I was like, eh.

Zongjun (Sam) Li (02:34)
perfect.

Ryan Ahn (02:35)
But this you know if you want to get a matcha. This is a decent place. I don't want it I drink too much matcha, which is kind of a lie It's true, but in reality I don't want to pay six euros for something that is just kind of mediocre by my standards

Zongjun (Sam) Li (02:50)
Yeah.

Ryan Ahn (02:50)
Not that I'm a matcha snob, but like really it's funny You talk to people in the industry who own matcha brands or are somehow working in matcha in some way They usually don't order matcha

one that go outside, which is pretty interesting phenomenon.

Zongjun (Sam) Li (03:05)
Yeah, I guess, you know, like the general expectation is just not there yet. And the general standard, the floor standard of matcha is not that yet.

Ryan Ahn (03:16)
That's

right. The floor is so low that it's oftentimes undrinkable and it's expensive.

Zongjun (Sam) Li (03:23)
Yeah.

Like if you walk into a specialty coffee shop and just like frequently you can see some good signs to make a good judgment of, know, if this coffee is going to be passable, decent, or, you know, it's actually probably going to be pretty good. Like if you look at the espresso machine, if you look at the, what grinder do they use, what pour over setup do they use and how people treat the bar counter.

you know, like the intentionality behind the service, like all of those can be, you know, you can find some traces of, you know, signs of, you know, if this copy is actually going to be worth the money that I'm going to pay. But you don't quite see these, you know, these, I would say evidence yet in, matcha, like those

Ryan Ahn (04:14)
Yeah.

Zongjun (Sam) Li (04:14)
not, not yet, like,

at least for me, like I haven't developed such a, you know, a way to be able to foresee if this matcha that I'm going to get is going to taste good.

Ryan Ahn (04:28)
But think you can have a negative filter. Like you see a giant glass jar that's open of matcha powder

Zongjun (Sam) Li (04:34)
You

Ryan Ahn (04:35)
exposed to light and the color of it, or a chasen that looks disgusting covered in green goop.

Zongjun (Sam) Li (04:41)
Well, Ryan, sadly, that's not even a filter. It's almost a status

Ryan Ahn (04:45)
Good

Zongjun (Sam) Li (04:46)
quote.

Ryan Ahn (04:47)
Yeah, a little pathetic. It's

even in places who are trying to do it justice. It's just nowhere close to their coffee program yet. So with all this frustration, you know, it's really worth a thought. What are the battles to be won? What needs to happen to get this movement to progress further?

Zongjun (Sam) Li (05:05)
I feel like matcha and coffee shared a pretty similar starting point, right? Starbucks is a pretty good gateway for people to get their first exposure to anything related to matcha. And that was the same story for coffee. A lot of people got into specialty coffee because of Starbucks, right?

Ryan Ahn (05:27)
Yeah, absolutely. And you know, if you talk to any of the specialty coffee people and influencers and change makers from James Freeman, founder of Blue Bottle, to James Hoffman, the famous YouTuber, Lance Hendricks, someone who's like really deep down the rabbit hole of coffee science, Matt Perger, you

Zongjun (Sam) Li (05:44)
Mm-hmm.

Ryan Ahn (05:44)
know, no one's gonna hate on Starbucks. Like everyone is very cognizant of the fact that without Starbucks,

there wouldn't have been this pool of consumers generally interested in coffee, then were the sub-segment that created specialty coffee. And what's weird, in the matcha world, ironically, everyone hates on Starbucks. They'll say Starbucks matcha powder is actually 85 % sugar, it's no good, some of it might not even be from Japan. You hear all of these criticisms. But Starbucks is like most people's first matcha.

Like they were so early, like 2005, in terms of exposing matcha to a consumer base that's not in Japan. Like there's probably no greater company that has increased awareness than Starbucks.

Zongjun (Sam) Li (06:34)
Yeah, wow, 2005. That's like 20 years ago. Oh my god.

Ryan Ahn (06:41)
So like in terms of battles to be won with basic awareness, mean, Starbucks might be the largest change maker introducing people to the idea of drinking matcha and a lot of people's first matcha that they've ever had. So I mean, a huge, you know, hats off to them for doing that kind of work because, you know, that's the start of the funnel, right? If you think in terms of the funnel of moving people into a specialty product, I think it's worth talking about, like, what do we mean by specialty matcha?

So, you know, the third way coffee movement, and I'll use coffee as the example, is all about tasting and appreciating the inherent flavor variety that you can have from the fact that coffee is an agricultural product. Different countries have different growing conditions, different plants have different cultivars or varieties, kind of like there's different types of apples, there's just like different types of coffee and different types of tea plant.

You have all this natural variation and it's a celebration of that variation where a naturally processed coffee in Colombia might taste totally different than a washed coffee in Ethiopia and then you can roast it in different ways to express different flavors. So it's really a celebration of that variance on the way it was grown and the way it was processed and the craft that was made to create it versus just your morning cup of coffee or coffee that you'd dump in a latte with milk and sweeteners.

And in matcha, this is beginning to exist, especially in the home market. Some markets are more sophisticated than others. There's this wonderful quote, I forget who it's attributed to, but they say that the future is already here, but it's not equally distributed. And that's very much the case for matcha. If you travel to places like Thailand, if you travel to some places in Japan, although it's actually kind of newer there, which is ironic because that's where the culture of drinking matcha comes from.

but also places like Singapore and the Philippines and in Malaysia, there's this culture of single origin, single cultivar matcha, where you can taste the inherent expressions based on processing difference or genetic differences of the plant or regional differences. And that's beginning to spread where people are really treating it like a specialty product. It's just very, very new.

So, Zongjun, what are some other battles to be won to get this to more successfully move this idea and getting other people to appreciate this matcha as a specialty product into the mainstream, both in the US and abroad?

Zongjun (Sam) Li (09:03)
I

think for the current stage awareness is definitely the key. We've been talking about Starbucks, we've been talking about this new specialty movement. At some point, I'm just going to use specialty coffee as example. You see how the specialty coffee movement, the cascade back to Starbucks at some point. And then,

That's, I think, a trigger, a tipping point of that whole specialty movement. You see specialty become mainstream. And I think something needs to happen in the future in matcha, too. Like one day, if we see how all of these big names start to do specialty label, transparent label, and start to educate, along with all of us, to consumers

matcha really is, I think that will be a big battle to be won.

Ryan Ahn (09:54)
Yeah, and I think for that to happen, like you just need to see enough success in the market. Like you see Starbucks opening these Starbucks Reserve stores and like, you you walk into them and like it is a specialty coffee experience. But the

Zongjun (Sam) Li (10:06)
Mm-hmm.

Ryan Ahn (10:07)
only reason that they can do that is that all these other specialty coffee companies have created educated consumers that can appreciate that. And you know, that the pendulum swings, know, pendulum swings back.

So I think what needs to happen is there needs to be a couple of players in the United States and in all other countries that just become radically so successful and so interesting and so different that people start copying them. And you see this all over the place. Great example are Australian-style cafes. There's this whole movement of Australian-style cafes. They usually have fantastic food programs.

great coffee programs, popularized drinks like the flat white. And that got spread all over the world. It got spread to New York right around the time when I moved there in 2016 with cafes like Black Fox. Now you have places like Suited and many, many others. You also see them all over the Middle East. If you go to Dubai, for example, or Abu Dhabi, all of the best cafes are almost entirely Australian run. And they all have very similar like DNA or very similar playbook.

that they use and it's a very successful playbook. And you see other playbooks in specialty coffee like the Nordic coffee roasters. You have people like Tim Windelbo, you have people like La Cabra, and you have people like copying this aesthetic. It's very minimalist. They have great pastry programs. And you have this more Nordic, and usually it's marked by lighter roast profiles, quite a bit greener, more acidic coffee. And you see people copying that.

all over the place. And in China, mainland China, it's a very different playbook. You know, they're mixing it with a lot of fruit juices. They're doing some interesting infusion work. And it's not just infusion for the sake of infusions. It's like, how do we work with this agricultural product that has these unique flavor attributes? And Halo masks

Zongjun (Sam) Li (11:58)
It's almost like.

Ryan Ahn (11:59)
some of those flavors in a creative way.

Zongjun (Sam) Li (12:01)
Yeah, it's almost like cocktails.

Ryan Ahn (12:04)
But I think this idea of developing a very successful playbook and having that replicated enough times will make it swing back to the mainstream where specialty matcha can be found at a place like Starbucks. The problem is that one, tea shops are not very common. They're very common to have a place that's 100 % dedicated to tea or to matcha. And most of the places were

coffee's being, or where matcha's being served on premise, is in a cafe setting. And usually, the founders of cafes and the operators of cafes have a huge passion for coffee. Occasionally, they're also interested in tea. But all,

Zongjun (Sam) Li (12:49)
Ha ha ha.

Ryan Ahn (12:49)
the majority of the case, it's an afterthought. These institutions are not going away. It's where the vast majority of the consumption's gonna be done on premise.

So what I think needs to happen is a playbook needs to be made, because it's not going to follow the exact path of coffee, because I don't see there being unique matcha houses and coffee houses everywhere. Like I think they will exist and they do exist right now, but I don't think they're going to become as ubiquitous as a specialty coffee shop. So developing a successful playbook for this to be a profitable and interesting part.

of the business for coffee people is going to be really important for matcha's long-term growth as a specialty product.

Zongjun (Sam) Li (13:31)
Yeah, like somehow we need to, you know, really be able to engineer ourselves into, you know, the word of coffee and use the language of coffee to, we need to attract coffee people to, to convert them into almost, you know, into into gospels of this new movement.

Ryan Ahn (13:53)
Yeah, absolutely. you know, the Japanese tea industry, and we've recorded some podcasts on this that people can back listen to for some more context, they're not doing themselves any favors by the lack of transparency, by the fact that it's very difficult to even ask questions around cultivars. I mean, try sourcing tea. It's interesting because we talk about transparent labeling all the time. We've heard stories of people sourcing from farmers.

multi-generational farmers that are basically doing like garden style farming. And so we're not talking about large volumes who do not let people selling their product use their name. You cannot say that this matcha is from this producer. Like in some cases, a lot of these brands that are being built are not allowed to be transparent.

Zongjun (Sam) Li (14:42)
No.

Ryan Ahn (14:42)
And in a lot of cases, you'll just be told, no, we're not telling you what's in this blend. We're not giving you the cultivars.

We're not giving you our intentions behind what this is. But those are the questions that get people interested. I mean, the coffee people don't even know the right questions to ask. Like they do, but they don't. And there's this like reverence of matcha being a product of tea ceremony, which is just like the essence of Japanese-ness. And there's actually a really great book about this that I'm reading at the moment called Making Tea, Making Japan.

and talking about how tea was used as a vehicle for nation building in Japan. And it really makes it this very high in the sky thing. And it's very difficult to put on a more critical set of lenses to analyze it as a specialty product because it's trapped in this traditional cage

Zongjun (Sam) Li (15:35)
Yeah.

Ryan Ahn (15:36)
at every level, whether or not it's the brands or the farmers or the blenders or the practitioners.

which makes this an exceptionally tricky problem from a battles to be won perspective in spreading the good world of specialty matcha so that more people can enjoy it.

Zongjun (Sam) Li (15:54)
Yeah, it will be hard when anything touches national pride or nationalism. And sadly, that's very true for Japan. And I guess the two parties, two parties meaning people in Japan and people outside of Japan, needs to eventually work together.

People

coming from outside needs to show knowledge, learning and respect. And people within Japan needs to be more inclusive, more open-minded to this new global movement. The future of matcha is not going to be inside Japan or at least for the near term, maybe in the long term too. The future of

Ryan Ahn (16:34)
Future growth, will always exist in Japan, but the growth

is not worth

Zongjun (Sam) Li (16:39)
Growth, yeah,

the growth is definitely outside of Japan. It's going to be a global movement in the future.

Ryan Ahn (16:46)
Yeah.

Zongjun (Sam) Li (16:47)
And for this to happen, everyone needs to work together and figure out a way to move forward.

Ryan Ahn (16:54)
Yeah, no, I totally agree.

So Sam, everything that we just discussed was largely around sort of on-premise or at a cafe where someone else is doing the preparation. But what if we flip this the other way and we're talking about the home brewing, home preparer market and that type of growth. What battles are there

Zongjun (Sam) Li (17:13)
haha

Ryan Ahn (17:13)
to be won to make that grow in a nonlinear way as a specialty product where people

are not just buying a random can of matcha, but they're buying a can of specialty product that has this story and we know where it came from and the producers and why it's special.

Zongjun (Sam) Li (17:30)
Yeah, I think the key problem for homebuyers is that most of people actually prefer to be a home drinker.

They don't want to really endure the headache of making matcha or cleaning all the utensils, cleaning all the mess in the kitchen. know, like occasionally it's great. Like it's ceremonial, it's meditative.

You pour your hot water in your morning bowl of matcha, you whisk it and you drink it and you feel good. And then, you you got to clean everything, you got to clean the dishes, you got to, you know, maintain the chasen. It's a lot of work. It's a lot of work. So somehow, you know, in the world of matcha,

some development needs to happen to erase those headaches.

Ryan Ahn (18:15)
Yeah, and I mean, that's assuming that you even know what to do, right? Like it's...

Zongjun (Sam) Li (18:20)
yeah.

Ryan Ahn (18:21)
Yeah.

Zongjun (Sam) Li (18:22)
It's

quite, you know, in order to even make the foam forth up properly, that takes some skills too. Like it's not, you know, really a day to day, you know, you can pick up any utensils and you can just make it. It's not that easy.

Ryan Ahn (18:39)
Yeah, I mean the matcha world needs to see like even I mean we have them now we have content creators, but we need to see even more explosion of content creators, educating people how to prepare it at home and enjoy it themselves. Basic knowledge around brew theory and extraction and you know where these different products come from and how to select them and what they might pair well against and you know how to use them and in different ways of how to use them.

I think would be really beneficial for this market. In the coffee world, you have very famous influencers now like James Hoffman or Lance Hendrick and there's many others, but they didn't exist like six or seven years ago. It's kind of interesting. At university, I founded the Coffee Club at Penn State.

And it was very difficult to find people who knew anything about specialty coffee. Our first meeting was, I think, was in 2015. And, it's a pretty large, international, diverse campus full of people. There was about 100 people came to the first meeting. Really, coffee club and university tends to attract a lot of people. People are interested in being caffeinated. Very few people knew what specialty coffee was. Almost no one had heard of, like, unquote, third wave coffee.

And it's just a very different scene now. I went back recently and the majority of the members are coming in with so much more knowledge and no doubt it comes from this explosion of amazing content that people are making. That's way beyond how to brew a cup of coffee. It's much more engaging in the stories that they're telling and brewing methods.

and this ecosystem of different brewing methods to get different results.

Zongjun (Sam) Li (20:23)
Yeah. And at

the same time, you will see this explosion of coffee equipment inventions, all of these hardware developments, all of these infrastructures that support all of these investigations, experiments. I think that's also very important. You see the word of hardwares between coffee and matcha. It's unparalleled.

Like for most of things that you still use to brew matcha today, like people use it like a couple hundred years ago too.

Ryan Ahn (20:53)
Which is both amazing and a little sad.

Zongjun (Sam) Li (20:56)
Yeah. And if you look at coffee, like a new coffee to get invented every day, almost like something needs to happen in the world of matcha too, to, know, at us, one, on one hand you want to, you know, let more people learn how to make matcha properly.

And also on the other hand, maybe we should all try to create some new tools to just help people erase the headache, help people get rid of the friction of making matcha every day. And I think that's super important. see, know, hardware's like cuzen that's trying to condense a lot of these processes in a little machine, which is great. But you know, like a lot of other things can happen as well.

the fresh grinding matcha mill that we are working right now. And there are many other things like chasan, like whisking bowl, a lot of these pinpoints that people can try to their, wrap their hats around and make some new innovations.

Ryan Ahn (21:55)
No, no, It's, you know, my, think one of my biggest matcha controversial hot takes is that it's not meditative or actually let me rephrase that. It's meditative for about 20 seconds.

Sandwiched between mess and stress of keeping all the dry equipment like the tea scoop dry.

and making sure matcha powder doesn't get everywhere and that it's sifted in doses and then that has to be cleaned but it can't get wet. All the way through to cleaning up what can sometimes be a bit of a mess. A lot of people quickly gloss over just like the Instagrammable video part and forget about the rest which is not so meditative I might add.

Zongjun (Sam) Li (22:37)
Ha

Yeah, that's very true. And

Ryan Ahn (22:38)
Yeah.

Zongjun (Sam) Li (22:40)
also, hardware can be what I was talking about, a label in a coffee shop. When I walk into a coffee shop, if I see the grinder is EK, if I see the espresso machine is a la marzocco, I would have some basic expectation of the quality of this coffee shop. And I think

there needs to be something like that in a coffee shop for matcha too. If you see some sort of equipment out there, you have some basic expectation of the quality of the matcha being made over there.

Ryan Ahn (23:11)
No, absolutely. Very important.

Another thing that I think is worth mentioning on an episode that's titled Battles to be Won is getting matcha in places where it has not traditionally been. How can people who are change agents from a marketing perspective expose new audiences through what we'll call cross-pollination? We've seen some pretty innovative frontier work.

done on that by brands like Kettle. It was crazy seeing their picture with Eric Repair from La Bernardin. I think it's one, it's not the, it's one of the best restaurants in the world. mean, he was friends with Anthony Bourdain, mean, getting matcha into a place like that, that's crazy.

Right? among

Zongjun (Sam) Li (23:58)
Yeah.

Ryan Ahn (23:58)
all like these other Michelin starred places, like that type of work is also very exciting, know, and spreading the good word as much as, know, that can be appreciated along with something like fine wine or fantastic food.

Zongjun (Sam) Li (24:13)
Yeah, do you record anything similar happened back in the days of specialty coffee, Ryan? Like what other interesting crossover have you seen?

Ryan Ahn (24:21)
That's a great question.

Well, one thing that coffee has really benefited from probably is in this kind of a crossover, but also kind of falls in the category of a novel format is the Tiramisu has probably done so much for getting

Zongjun (Sam) Li (24:37)
No.

Ryan Ahn (24:37)
people to try coffee flavor

Zongjun (Sam) Li (24:40)
Mm.

Ryan Ahn (24:41)
and open their minds to it. Like it's part of the ubiquity plays into the ubiquity of people having it in a dessert format, in a creamy format.

where it's not just folders in your cup at home. That probably like, talking about rising tides, lifting all boats, that probably helped rise the tide quite a bit. And these types of novel formats. Matcha has this a little bit, like with maybe like matcha Kit Kat or like Haagen-Dazs matcha ice cream, but it's not nearly as pervasive as some of these other pretty interesting, we'll call it exposures. Like if you think of,

Like getting into matcha, need to have like a form of exposure therapy, like a very similar thing by just getting it in some very novel formats.

Zongjun (Sam) Li (25:23)
Mm. Well, you kind of see that happening more and more, like in bakeries, people using matcha as an ingredient. I remember back in the days, I was really into this matcha crepe cake made by Lady Anne. That was very delicious. And...

They only had branches in Europe and Asia, but I think back in 2017, 18, they opened a branch in New York. And it

Ryan Ahn (25:49)
Okay, interesting.

Zongjun (Sam) Li (25:51)
was a big hype at the time.

Ryan Ahn (25:53)
Well, I mean, these novel formats are so important. And we're also starting to see companies using it in CPG products or consumer packaged goods, like stuff that you'd buy at the grocery store. A lot of that is in the form of RTD, ready to drink. Or can pop open a can and boom, matcha latte. Or boom, plain matcha even, matcha shot. That also helps.

Zongjun (Sam) Li (26:16)
Yeah, in CPG products. It's so hard to turn matcha into a CPG product. Yeah.

Ryan Ahn (26:21)
Yeah, because it will settle on you. So it's like unless

you're shaking it or it's in something very viscous or you have some type of stabilizer, it's a tricky problem. But there's some very good matcha RTD products out there. Anyone in the States, there's a product, I don't know if it exists anymore, but at least I haven't seen it in a while. It's called Motto matcha, M-O-T-T-O. And I think it's a sparkling matcha.

It's a lemonade-like product, but it's not lemonade. I think there's some apple, and there's a light sweetener, and a little bit of acidity. It's very good. Well worth

Zongjun (Sam) Li (26:58)
sounds good.

Ryan Ahn (26:58)
a try. Used to be able to find it at Whole Foods. I assume it's still there, but I haven't looked or seen it in a while since I moved.

Zongjun (Sam) Li (27:05)
back in the days, I used to really enjoy this matcha beer

It was really good. Matcha and beer, and in a tall, thin glass, in a hot summer day, wow, that's fantastic.

Ryan Ahn (27:15)
So Sam, I got another one, which I think is a good one to end on in terms of battles to be won. one of the things that the third wave coffee movement and the specialty coffee movement did is it got consumers willing to pay more for a better product,

Zongjun (Sam) Li (27:32)
Mm.

Ryan Ahn (27:33)
which I think largely defines most specialty industries. Like you show how much you value something typically with your wallet.

Zongjun (Sam) Li (27:41)
Yeah, I think the problem right now

Ryan Ahn (27:42)
So how

do we get people to, how do we get more matcha consumers willing to pay more for a better product?

Zongjun (Sam) Li (27:51)
I think the problem right now is that people are paying more for a very mediocre product. think

Ryan Ahn (27:57)
Yeah.

Zongjun (Sam) Li (27:59)
like two things needs to happen first, good quality, cheaper matcha needs to exist. And with that as a baseline, people will naturally be willing to pay more for a better, even better quality product.

Ryan Ahn (28:14)
I totally agree.

Zongjun (Sam) Li (28:14)
Because

that way they know the premium went straight into the quality, not into some middle dealer's pocket.

Ryan Ahn (28:22)
Yeah, there's very few well-priced, reliable, consistent, available matchas that I can think of where I would be happy to just drink it or pay for it if someone is brewing it in a cafe or something. You don't have that moment, I guess like Starbucks is the best example. It's like, yeah, like you get a filter coffee at Starbucks, it's...

The same everywhere. It's pretty good. Is it specialty? No. No one's going to give Pike Place Blend any awards. But it's a cup of coffee. It tastes good. It's fine. It's

Zongjun (Sam) Li (29:01)
Yeah.

Ryan Ahn (29:02)
totally drinkable. But I agree. But I also think opening up more to story, storytelling, getting people to appreciate a better product, transparent labeling, which we talk about.

ad infinitum, but really the quantitative and qualitative elements behind transparent labeling need to be stories intermixed with hard metrics that people can use to judge whether or not they would like something and how they would value it. So you see companies like Ooika, you see people like...

Kettle like Matsu matcha like Johnny matcha like and the list goes on and on and on just giving on love unprecedented levels of transparency And giving people stories about the farmer and why they should be interested in all of this stuff in the first place

Zongjun (Sam) Li (29:51)
Yeah.

Ryan Ahn (29:52)
And then like backing it up with hard numbers So seeing more and more of that. I think it's a huge battle to be won, right? That's happening right now

pretty fast at a pretty good scale, but really scaling that up. And I think also we'll require an on the ground effort, which is where I think this can go full circle. We're getting like baristas really interested in matcha and to have cafe owners invest more in their matcha program where it's obvious that they care about it, at least at a similar level that they care about their coffee.

You know, they're the on the ground people that can explain, yeah, this is the difference between Uji and Yame matcha. This is the difference between a first harvest or second harvest product, or this is the difference between these cultivars and why they're interesting. And we selected this one for this application because it's better. And this one we recommend you just drink with water. And you know, I think a really low-hanging fruit one is getting a matcha drink out in the world that's standard that doesn't have milk.

There's a huge, most specialty people don't consume milk-based beverages. And I think they're an excellent gateway, but the moment that a cafe could be proud to serve something like an Americano that would taste good, and most cafes, if you ask them to make a matcha with just water, they'll say no, probably because it won't taste any good, because the baseline matcha that they're using just isn't suitable for that application.

Maybe they even pick something very strong so it stands up to the milk. But in just water, it's too much, it's too intense. So I think that will be the next major wave, where something like an usucha thin tea, or a more light brew style Americano, where that becomes more prevalent. That's when you can really start getting into the differences between cultivars or regions or things like that. And that's a huge battle to be won.

and something that I'd love to see more and more businesses and consumers try to push for at the cafes to offer that so that people can directly taste it. And to have a coffee professional, a beverage professional, tea professional explain to you why something is special. And that can really be done at the grassroots local level.

Zongjun (Sam) Li (32:06)
Yeah, totally agree. it needs to there needs to be a knowledge structure slowly getting infused into consumers with real world references. Like they can actually learn and they can actually try and they can actually verify their knowledge. And I think that's very important. And then in the future, you know, consumer can make decisions based on your own formative experience.

of how they learned about matcha in the past versus getting blindly educated on the matcha that they're buying is ceremonial grade, imperial grade, triple A quadruple A grade. That's a very top-down, almost condescending way of labeling or teaching people what's good quality matcha, which is not.

really the way that it should be happening.

Ryan Ahn (33:00)
Totally agree. context to ask the right questions to determine quality for themselves or pinpoint them to products that will meet their preferences. right now the baseline sort of educated matcha consumer They only know to ask whether or not something is ceremonial.

which

Zongjun (Sam) Li (33:19)
No.

Ryan Ahn (33:20)
we've recorded before, but it's a made up label. Anyone can

Zongjun (Sam) Li (33:23)
Yeah.

Ryan Ahn (33:23)
call anything ceremonial grade. So it's a bad framework. It kind of almost treats consumers like they're stupid when you call something ultra, super, duper, premium, ceremonial grade.

Zongjun (Sam) Li (33:36)
Or

it can be even worse in Japan. All the matcha are in these variable poetic names that can actually change from season to season. Like

Ryan Ahn (33:46)
You

Zongjun (Sam) Li (33:47)
the Hatsumukashi you're drinking today is not going to be the same thing three months later. That's almost consumer gas lighting.

Ryan Ahn (33:55)
Actually, I have an update on the Hatsumukashi example that we talked about in previous episode for repeat listeners. I recently saw one that I think was about $250 US dollars, labeled Hatsumukashi.

Zongjun (Sam) Li (34:06)
my god.

Ryan Ahn (34:07)
Not that we're the naming police, but it just goes to show the absurd spread, ranging from less than $6 to $250.

It's very confusing. I've even met people who own matcha brands and businesses that are confused by Hatsumokashi naming convention. It's a bit crazy, the state of the world.

Zongjun (Sam) Li (34:28)
This

obsession is really weird. Hatsumugashi literally means like the beginning of nostalgia or like a beginning nostalgia, something like that. I wonder where this obsession comes from. It's really weird.

Ryan Ahn (34:44)
That

would be an interesting podcast. Well, the history of Hatsumukashi Love to

Zongjun (Sam) Li (34:47)
Yeah.

Ryan Ahn (34:48)
do that. This one, it makes some good content.

Zongjun (Sam) Li (34:51)
Yeah, yeah.

Ryan Ahn (34:53)
as we wrap up, just to give sort of a high level framework for different battles to be won, I guess one is growing matcha awareness, which is well on its way, but that's a never ending journey. The second one that I have are getting matcha into new places, like fine dining, for example, or into

Zongjun (Sam) Li (35:08)
Yeah.

Ryan Ahn (35:09)
a luxury store, into a fashion house, things like that, like what Rocky Matcha is doing.

Zongjun (Sam) Li (35:14)
exposure of people that are maybe not even coffee drinkers. that's, cause right now the most conversion happens within coffee shops and people that have been drinking coffee. But there are a lot of people that just don't even go to coffee shops. And how do we convert those people into

drinking?

Ryan Ahn (35:34)
We can also use things like novel formats, desserts, candies, ready to drink beverages that are pre-packaged. Like all of that, if you think about it from like a quote unquote exposure therapy perspective, can really get people interested in the product and trying it for the first time and perhaps a more friendly way than getting it as an usucha or an americano or even as a latte.

Zongjun (Sam) Li (35:58)
Yeah.

Ryan Ahn (35:59)
And I think the biggest one for the specialty market are everyone who is helping consumers be willing to pay more for a better product. And that really is kind of the definition of what specialty is. You learn about something, you appreciate some aspect of it, and then you're willing to pay more for it because it has some unique characteristics. So that's the world that we would like to see. And I think these are all very...

Zongjun (Sam) Li (36:20)
Yeah, that's a win-win

situation for everybody. Like consumers getting a better product, vendors are making more money, and then that finally will cascade down to matcha farmers, which are really, sadly, the bottom of this whole hierarchy. They are the people touching the earth, managing the bushes.

and they are getting the least attention and the least profit from the whole chain, which is very sad.

Ryan Ahn (36:47)
Yeah,

it's very sad and it's a system that could use some shaking up and also people working on innovation, on making matcha easier to make or shortening the supply chain. We see companies like Brian at Matsu matcha very carefully managing his inventory and stocks so that as soon as it comes off the plane, it immediately goes into cold storage. He only keeps it for so long and buys everything basically in a mill-to-order format.

know, Kettle's doing a very similar thing where they're placing orders so it can be, it can go through the Shiage process fresh, trying

Zongjun (Sam) Li (37:24)
Result

Ryan Ahn (37:24)
to rethink the supply chains a bit and like all other companies working on technology, like Mark and Ooika milling matcha fresh much closer to the consumer, right? That's unheard of. So there's all these very exciting things that are going on and so many battles to be won.

Very optimistic actually with the community of matcha businesses and people working in matcha that are really

Zongjun (Sam) Li (37:46)
Yeah.

Ryan Ahn (37:46)
helping spread their own appreciation of this thing and helping farmers along the way and helping consumers along the way and helping spread what is a really interesting cultural artifact of Japan, which is this incredible product that is matcha.

Zongjun (Sam) Li (38:04)
Yeah, matcha is very old, but the global matcha community is actually very young and it's growing, which is very exciting.

Ryan Ahn (38:12)
Very exciting.

Zongjun (Sam) Li (38:13)
Yeah, it's far, far, far away from a zero sum game. We are all working together to grow the pie larger.

Ryan Ahn (38:20)
So many battles to be won. So if we missed any, we'd love to hear from you and tell us some other aspects that you think could drive this industry forward. We'd love this to be a community-based conversation and yeah, it really energizes us when people reach out. So please do.

So thanks so much for listening. If you enjoyed this, please consider sharing it with a friend or rating us on the platform you're listening on. And thank you so much, and we'll see you on the next one.

Zongjun (Sam) Li (38:45)
See you in the next episode.